From an article at cbsmarketwatch, we find that one of the major homebuilders, Hovnanian Enterprises decided to drop prices due to painfully high supply of new homes. Faced with declining sales and declining profit margins Hovnanian bit the bullet and lowered prices dramatically. They dropped homes $100,000 which some saw as an indication of how bad things are - fair observation, however the stock went up $3.22 or 28%. Thats quite a lot of applause!
Heres whats amazing: Home sales went up at ten times the recent sales rate. "There are interested buyers in the marketplace," Hovnanian said, but they are hesitant because they want to catch the bottom. "Competitors are likely to respond with even bigger discounts, so deals for home buyers are likely to get even better over time," wrote Banc of America Securities analyst Daniel Oppenheim in a research note this week.
At the right price buyers are everywhere...
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